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Flashcards in Products Place And Price Deck (6)
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1

Distinguish between the 5 characteristics of services

1. Intangible - main distinguish between goods and services. * can not be seen, touch or smell before purchase, * judgmentis based on attitudes, feeling, perception and experience.
2. Inseparability - simultaneously deliver and consumption of service, distribution roles are integrated, can not exist without a customer.
3. Hetoregeneity- standardization of output is usually difficult. Units differ in price, quality and conformity. People and performance are not consistent.
Ownership - customers only access a service, no ownership transfer fees, payment is for hire or temporary use.
4. Perishability - services are perishable and cannot be stored, services are time dependant, quality lies within the provider

2

Four objectives of pricing used in order to set the prices of their products

1. Competive pricing
2. Prestigevpricing
3. Profitability pricing
4. Volume pricing

3

Explain competitive pricing

This frequently used pricing objective is to match the price ready set by the industry leader. A company focuses its efforts on other ways to attract new customers.

4

Explain Prestige pricing

-the company may promote, maintain or enhance an image of their product through the use of Prestige pricing which involves pricing the product in a higher price range.
- this is done to limit its availability to the higher end consumer
- this limited availability enhances the products image causing it to be viewed as prestigious.

5

Explain Profitibility pricing

_ the basic idea is to maximize profit
- the formula for this objective states (Profit = Revenue - Expenses)
- Revenue is determined by a products selling price and the number of units sold.

6

Explain Volume Pricing objevtive

- when a company uses this objective, it is attempting to maximize sales within predetermined profit guidelines.
- a company using this objective prices a product lower than normal but expects to make up the difference with a higher sales volume